The potentially fatal legionella bacteria has been discovered in the water system of Santos’ coal seam gas camp at Bauhinia, south-west of Gladstone.
The discovery was made by contractor Saipem during routine testing of the site's water supply, the Gladstone Observer reported.
"Saipem advises that as is standard practice, a follow-up test was conducted to confirm the initial result, and the camp was closed," a Santos spokesperson said.
"Following Saipem's standard protocols, the pipes in the camp will be cleaned and treated to kill the bacteria, until which time the camp will remain closed," the company said.
This latest outbreak has prompted the Australian Manufacturing Workers Union to call for tighter regulation of mining camps.
The union’s Gladstone representative Phil Golby said Santos was right to temporarily shut the camp, "but I daresay the only reason they have done it is because if there are any incidents they would be held accountable".
Saipem advised that no workers who were at the camp before its closure had reported symptoms of legionnaires disease which is a type of pneumonia..
Golby said that it was lucky the testing had found the bacteria early before any employees contracted the disease.
"It shows there's a problem and a problem that needs to be fixed, but it does show that their monitoring system is working," he said.
Santos’ camp is not the only site to experience disease outbreaks.
"These are some of the issues where we get a lot of people together that have to come in and live for short periods of time, with this contaminated water," Golby told the ABC.
"Also with outbreaks of other diseases in other camps in the Emerald area – suspected scabies, are quite common in these camp-type living accommodations," he said.
Santos denies anonymous reports that some workers had already tested positive to legionnaires disease.
Representatives from local council and Queensland Health had been sent onsite to check the water supply set up last week.
"Our guys have been involved in some of the inspections with camps around the place, including this one, and we have been down to check it out," Central Highlands Mayor Peter Maguire said.
"We have to do testing on our systems daily and they have been doing that and found a problem and, to their credit, they shut the camp down," he said.